AT A GLANCE

February 2014


A Framework for Audit Quality
This summary provides an
overview of the IAASBs
Publication: A Framework for
Audit Quality: Key Elements
that create an Environment for
Audit Quality.


Objecti ves: Global financial stability is supported through high quality reporting. Audits can
help foster trust in the quality of reporting. This highlights the importance of
audit quality - a topic of continuous debate - and of relevance to all stakeholders
in the financial reporting supply chain.
With this in mind the IAASB developed the Framework for Audit Quality that
describes in a holistic manner the different elements that create the
environment for audit quality at the engagement, firm, and national levels, as
well as relevant interactions and contextual factors.
The objectives of the Framework for Audit Quality include:
Raising awareness of the key elements of audit quality
Encouraging key stakeholders to explore ways to improve audit quality
Facilitating greater dialogue between key stakeholders on the topic
The IAASB expects that the Framework for Audit Quality will generate
discussion in the financial reporting supply chain, and positive actions to
achieve a continuous improvement to audit quality.
For more information: See https://www.ifac.org/auditing-assurance/focus-audit-quality
Status: The Framework for Audit Quality is a non-authoritative document. It is not a
substitute for auditing standards, standards of quality control, ethics and other
regulatory requirements nor does it establish additional standards or provide
requirements for the performance of audit engagements.
This At a Glance publication has been prepared by staff of the IAASB for information purposes only. It does not form part of the standards or other authoritative publications of the IAASB. It has not
been reviewed, approved or otherwise acted upon by the IAASB.

Benefiting from the Framework for Audit Quality
The Framework for Audit
Quality describes the key
elements that create an
environment for audit quality.

The value of the Framework for
Audit Quality starts when audit
firms, regulators, audit
committees, investors,
universities and other
stakeholders who have an
interest in continuously
improving audit quality are
encouraged to challenge
themselves about whether
there is more that they can do
to increase audit quality in their
particular environments.
Who should use it and how?
The IAASB believes that the Framework for Audit Quality is an important basis for continuously improving audit
quality, and encourages stakeholders to use it, including:
National audit firms, global networks, and professional accountancy organizations, for example to reflect on
how to improve audit quality and better communicate information about audit quality.
Those charged with governance, for example in considering the effectiveness of the audit in the context of their
roles in audit committees.
Public Sector organizations, for example, in their work in improving the quality of public sector audits.
Regulators, for example in assessing the need for regulation and guidance material to achieve improvements in
audit quality.
Oversight bodies, for example, in evaluating their oversight activities to enhance audit quality.
National Standard Setters, for example in their standard setting activities and issuing guidance to improve audit
quality.
Academics, for example, to structure academic research on the topic and assist students of auditing to
understand the full context of audit quality.

The development by stakeholders of user guides, toolkits, topics to explore or other
vehicles for discussion between stakeholders or among stakeholders themselves is
encouraged.

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Framework for Audit Quality

Audit Quality encompasses the key
elements that create an environment
which maximizes the likelihood that
quality audits are performed on a
consistent basis.
Elements of the Framework for Audit
Quality:
Inputs
Processes
Outputs
Interactions
Contextual Factors
While the primary responsibility for
performing quality audits rests with
auditors, audit quality is best achieved in
an environment where there is support
from other participants in the financial
reporting supply chain.


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Input Factors, Process Factors, Output Factors, Contextual Factors and .
Inputs
Quality audits involve auditors:
Exhibiting appropriate values, ethics and
attitudes; and
Being sufficiently knowledgeable, skilled,
experienced, and having sufficient time
allocated to them to perform the audit work.
Within each of these categories quality attributes
are further organized between those that apply at
the engagement, firm, and national level.




Process
Quality audits involve auditors applying a rigorous
audit process and quality control procedures that
comply with laws, regulations and applicable
standards. In this regard various quality attributes
are further organized between those that apply at
the engagement, firm, and national level.







Outputs
Quality audits result in outputs that are useful and
timely. Outputs are described in relation to the full
reporting supply chain and they include outputs
from:
The auditor
The audit firm
The entity
Audit regulators
Outputs include reports and information that are
formally prepared and presented by one party to
another, as well as outputs that arise from the
auditing process that are generally not visible to
those outside the audited organization.

Contextual Factors
Quality audits involve auditors who respond
properly to contextual factors. Contextual factors
are described as having the potential to impact the
nature and quality of financial reporting and, either
directly or indirectly, audit quality.
These include:
Business practices and commercial law
Laws and regulations relating to financial
reporting
The applicable financial reporting framework
Information systems
Corporate governance
Financial reporting timetable
Broader cultural factors
Audit regulation
Litigation environment
Attracting talent
Financial reporting timetable

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..Interactions


Quality audits involve auditors interacting properly with the stakeholders
in the financial reporting supply chain. The interactions between the
following key stakeholders are described:
Auditors
Management
Those charged with governance
Users
Regulators


These interactions, including both formal and informal communications,
will be influenced by the context in which the audit is performed and
allow a dynamic relationship to exist between inputs and outputs.

While each separate stakeholder in the financial reporting supply chain
plays an important role in supporting high-quality financial reporting, the
way in which the stakeholders interact can have a particular impact on
audit quality.


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Continuing the Dialogue
The Framework for Audit Quality is
an important milestone, but only
one step in a continuous process of
improving audit quality.
The IAASB will continue to take
further steps to contribute to
enhancing audit quality through its
standards setting work, and by
promoting further dialogue on audit
quality and stimulating other
organizations to use the Framework
for Audit Quality.
All stakeholders are encouraged to
consider how they may use this
Framework for Audit Quality in
reflecting on how they may
influence improvement in audit
quality.
Next Steps
The context in which an audit is undertaken is continually evolving to keep pace with changes in the
business environment, in perceptions on the scope of auditing, in financial reporting standards, in
regulation, and in technology. Intrinsically, an audit is an activity that evolves over time. The pursuit of
audit quality is therefore not a program with a definitive outcome. Rather, it is a process that ensures
that, through continual improvements in its elements, audit quality evolves with the environment in which
audits are performed.

The IAASB will therefore continue to take steps to further promote dialogue on audit quality and stimulate
organizations to use the Framework for Audit Quality. To support the use of the IAASBs Framework for
Audit Quality the IAASB will:
Establish a new Audit Quality page on the IAASB website to promote the Framework for Audit
Quality and keep stakeholders informed about developments.
Give prominence to the Framework for Audit Quality in IAASBs outreach and liaison activities.
In due course evaluate how and in what way the Framework for Audit Quality is being used and
consider follow up activities.



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